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Tax Credit Officially Extended -- November 2009
President Obama has signed off on the bill, and the Tax Credit for home buyers has been extended into 2010. However, this tax credit does have some key differences from its predecessor; the main difference being that the eligibility for the credit has now been extended to MOVE UP BUYERS as well. The bill is outlined as follows:
Eligibility Requirements
First time buyers are defined as purchasers who have not owned a principal residence during the three year period prior to their home purchase. The first-time buyer credit limit is capped at $8,000. Move-up buyers (existing homeowners) have lived in their principal residence for 5 out of the last 8 consecutive years. The move-up buyer tax credit is capped at $6,500.
Income Limitations
Single taxpayers or taxpayers claiming head-of-household status can claim the full tax credit amount ($8,000 first-time, $6,500 move-up) if their adjusted gross income (AGI) is under $125,000. Married couples filing jointly can claim the full credit amounts if their AGI is under $225,000. Partial credit amounts are available to single taxpayers (or head-of-household filers) with a reported AGI between $125,000 and $145,000 and married filing jointly taxpayers whose AGI is between $225,000 and $245,000. Single or head-of-household filers whose AGI exceeds $145,000 are not eligible for the credit. Additionally, married filing jointly taxpayers whose AGI exceeds $245,000 are not eligible for the credit.
The new Tax Credit is available for homes purchased November 7, 2009 - April 30, 2010 and settlement must occur prior by June 30, 2010. The tax credit is eligible on principal residences purchased under $800,000 only. Vacation and rental homes do not qualify for the tax credit.
** Payback: The tax credit does not have to be paid back unless the homeowner either stops using their purchased home as their principal residence or sells their home within a three year window after purchase.
